June 2025: 1.44% (A grade)

Tennessee inventionINDEX June 2025: 1.44% (A grade)

The inventionINDEX measures innovation output by comparing GDP growth with patent production growth. 

Anything over C grade is positive sentiment; anything under C is negative outlook/sentiment. Using that sentiment, it is possible to observe trends over time, and also compare states/countries. In doing so, we can predict which states have the best chance to recover economically from the pandemic (or any other economic incident that may occur).

The Tennessee inventionINDEX score for June 2025 stands at 1.44%, showing a modest month-over-month increase from May’s 1.37%. While not the highest point in the past year, the latest figure signals a positive shift following a slight downward trend in the previous months. Compared to the 12-month high of 1.75% recorded in February 2025, June’s result indicates a stabilizing period that may reflect a more measured but sustained level of inventive activity in the state. This rebound after two consecutive months of lower scores could suggest renewed momentum in patent filings, innovation investment, or research commercialization.

Looking at the broader context, Tennessee’s performance remains relatively solid. The score has remained above the 1.25% threshold since November 2024, with only minor fluctuations. The June 2025 score sits slightly below the average of the past 12 months, which hovers around 1.51%, but still well within a healthy range. This consistency is noteworthy, particularly when compared to more volatile periods seen in other states, suggesting a relatively resilient innovation ecosystem in Tennessee.

A higher inventionINDEX score typically correlates with stronger innovation output, which can lead to broader economic benefits such as job creation, increased venture activity, and improved competitiveness in high-tech sectors. For academic institutions and industry leaders, a higher score often reflects successful translation of research into intellectual property, strengthening Tennessee’s profile as a hub for innovation.

On the other hand, a downward trend in the inventionINDEX could raise concerns among stakeholders. Lower scores may point to reduced R&D investment, delays in patent processing, or diminished entrepreneurial activity. Over time, this could erode the state’s innovation pipeline, potentially making it less attractive to investors and technology firms. While June’s score is reassuring, maintaining or improving it will be essential to safeguard Tennessee’s innovative standing in a competitive national landscape.

Discussion:

In June, the Tennessee inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed the upward trend for the year. This is in contrast to the prior 12 months, which experienced a slight downward trend. 

As the economy continues to stabilize in the post-pandemic era, it remains uncertain whether any backlog of applications still exists or if the department has returned to normal processing timelines. The inventionINDEX could also be affected by lingering consequences from the pandemic, such as company closures, reduced workforces, and limited R&D capabilities, which may still be impacting current operations.

Learn More:

Are you thinking of patenting any of your bright ideas? Did you know your research work could be eligible for the R&D Tax Credit and you can receive up to 14% back on your expenses? To find out more, please check out our free online eligibility test.

Swanson Reed’s Tennessee office provides R&D tax credit consulting and advisory services to Nashville, Memphis, Knoxville, Chattanooga, Clarksville, Murfreesboro, Franklin, Jackson, Johnson City, and Bartlett.

Feel free to book a quick teleconference with one of R&D tax specialists if you would like to learn more about R&D tax credit opportunities.

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